Denel and Airbus Military have finalised a new agreement with revised terms for manufacturing aircraft components on the A400M, in a development that will contribute significantly to the financial turnaround of the South African company and confirms its position as a top-tier supplier on the world's most advanced military airlifter.
(Image: Wikimedia Commons)
The renegotiated agreement was signed yesterday at a function in Kempton Park attended by the Minister of Public Enterprises, Malusi Gigaba, the senior vice-president of Airbus Military, Antonio Rodriguez-Barberán and the chairman of the Board of Denel SOC, N R Zoli Kunene.
Minister Gigaba said the new agreement demonstrates the confidence of major global aerospace companies in the abilities of the local manufacturing sector. "The relationship between Airbus and Denel takes us another step further towards the growth of a fully-fledged South African aerospace industry," he said.
Riaz Saloojee, the group chief executive of Denel SOC, says the relationship with Airbus positions DAe as an established supplier of high-tech aircraft parts and strengthens South Africa's position in the global aerospace industry.
Airbus Military senior vice president commercial, Antonio Rodriguez-Barberan, stated that the agreement "re-affirmed Airbus Military's commitment to South Africa and its industrial partners and suppliers in the country. With series production of the A400M ramping up ahead of the first deliveries next year, it is comforting to know that we have a dependable partner in Denel Aerostructures which can be relied upon to provide top quality work, on-time and within budget".
Denel Aerostructures (DAe) manufactures two major work packages on the A400M, the Wing-to-Fuselage Fairing and the Top Shells that form part of the aircraft's mainframe.
Saloojee says the new agreement together with the restructuring of the company and a strong order pipeline will enable Denel Aerostructures to return to profitability within the next three to four years in line with a turnaround strategy introduced in 2010.
The Government has demonstrated its confidence in the future of the company through a capital injection of R700m, earlier this year. "This agreement has vindicated this confidence and confirmed the viability and inherent potential of Denel Aerostructures in the years ahead," he says.
(Image: Wikimedia Commons)
The CEO of Denel Aerostructures, Ismail Dockrat, says the company has already ramped up its production of vital parts for the A400M that will be delivered to customers in the coming months. DAe is one of a select few companies outside of Europe responsible for the design and manufacturing of vital parts on the high-speed turboprop aircraft.
Dockrat says the new agreement will strengthen DAe's capacity to market its products and services to other aircraft manufacturers and to enter into new partnerships for future projects.
Denel's participation in the programme has already brought significant benefits to the local aerospace industry. The new agreement will stabilise local supply chains and give experience to smaller sub-contractors to perform work on a global programme.
Saloojee says the contract with Airbus confirms South Africa's status as a reliable supplier to multinational projects and an innovative design partner. "It provides DAe with the know-how and capacity to participate in future multinational ventures and to grow the local industry, as envisaged in the recent Defence Review 2012.
"It will strengthen DAe's position in South Africa's aerospace industry and confirms its position as a strategic public asset, its contribution to skills development and advanced manufacturing and it's potential to generate export revenue for the country," says Saloojee.
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